An A-B trust is a revocable living trust which divides into two trusts upon the death of the first spouse. This type of trust makes use of both the estate tax exemption ($3.5 million per person in 2009) and the marital deduction to make it so that no estate taxes are due upon the death of the first spouse. The B Trust is also known as the Bypass trust and it contains the amount of that years applicable exclusion amount. The A trust is the marital deduction trust which will typically contain both the surviving spouse's separate property and one half community property interests but also the residue of the deceased spouse's estate after the estate tax exemption has been utilized by the B trust. The use of an A-B trust ensures that both spouse's applicable exclusion amounts are effectively used, thereby doubling the amount of property which can pass to heirs free of Federal Estate Taxes.
A South Dakota Marital Deduction Trust is a type of estate planning tool that allows married couples to reduce their estate tax liability while ensuring the financial security of their surviving spouse. This trust consists of two main components: Trust A, also known as the Marital Trust, and Trust B, commonly known as the Bypass Trust. Trust A, the Marital Trust, is designed to provide financial support to the surviving spouse during their lifetime. The assets placed in Trust A are eligible for the marital deduction, which means they will not be subject to estate tax upon the death of the first spouse. The surviving spouse can receive income generated by the trust and, in some cases, even have access to the principal. This trust ensures that the surviving spouse has access to financial resources while also taking advantage of the estate tax savings. Trust B, the Bypass Trust, is structured to maximize estate tax savings by utilizing the deceased spouse's estate tax exemption. Upon the first spouse's death, a certain amount of assets, up to the estate tax exemption limit, is placed in Trust B. These assets will be excluded from the surviving spouse's estate and will therefore not be subject to estate taxes upon their subsequent death. The income generated by Trust B may be distributed to the surviving spouse and, in certain circumstances, even provide access to the principal. However, the primary purpose of Trust B is to preserve the assets for future generations by keeping them outside the surviving spouse's estate. In addition to the standard South Dakota Marital Deduction Trust, there may be variations or subtypes tailored to specific needs, such as the Qualified Terminable Interest Property (TIP) Trust. A TIP trust allows the granter to control the ultimate distribution of the trust's assets upon the surviving spouse's death, ensuring that the assets pass according to their wishes, even in the case of subsequent marriages. Overall, a South Dakota Marital Deduction Trust, consisting of Trust A and Trust B, is a powerful estate planning strategy that allows married couples to minimize estate taxes, ensure financial stability for the surviving spouse, and preserve wealth for future generations. Trust Bypass Trust, TIP Trust, and other variations are examples of specific types of marital deduction trusts that can be utilized based on the unique circumstances and goals of the individuals involved.A South Dakota Marital Deduction Trust is a type of estate planning tool that allows married couples to reduce their estate tax liability while ensuring the financial security of their surviving spouse. This trust consists of two main components: Trust A, also known as the Marital Trust, and Trust B, commonly known as the Bypass Trust. Trust A, the Marital Trust, is designed to provide financial support to the surviving spouse during their lifetime. The assets placed in Trust A are eligible for the marital deduction, which means they will not be subject to estate tax upon the death of the first spouse. The surviving spouse can receive income generated by the trust and, in some cases, even have access to the principal. This trust ensures that the surviving spouse has access to financial resources while also taking advantage of the estate tax savings. Trust B, the Bypass Trust, is structured to maximize estate tax savings by utilizing the deceased spouse's estate tax exemption. Upon the first spouse's death, a certain amount of assets, up to the estate tax exemption limit, is placed in Trust B. These assets will be excluded from the surviving spouse's estate and will therefore not be subject to estate taxes upon their subsequent death. The income generated by Trust B may be distributed to the surviving spouse and, in certain circumstances, even provide access to the principal. However, the primary purpose of Trust B is to preserve the assets for future generations by keeping them outside the surviving spouse's estate. In addition to the standard South Dakota Marital Deduction Trust, there may be variations or subtypes tailored to specific needs, such as the Qualified Terminable Interest Property (TIP) Trust. A TIP trust allows the granter to control the ultimate distribution of the trust's assets upon the surviving spouse's death, ensuring that the assets pass according to their wishes, even in the case of subsequent marriages. Overall, a South Dakota Marital Deduction Trust, consisting of Trust A and Trust B, is a powerful estate planning strategy that allows married couples to minimize estate taxes, ensure financial stability for the surviving spouse, and preserve wealth for future generations. Trust Bypass Trust, TIP Trust, and other variations are examples of specific types of marital deduction trusts that can be utilized based on the unique circumstances and goals of the individuals involved.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
